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The SaaS KPIs Master List: 24 SaaS Metrics
You Should Track

SaaS KPIs

 

In whatever you do, you measure what you value, especially in the SaaS business.

If you’re on a diet, you’re probably measuring your weight. If you’re saving up for something, you need to count the money that you have from time to time.

And if you want to grow your SaaS businesses? You need to measure your SaaS KPIs (key performance indicators).

The thing is that there are a lot of KPIs and metrics to consider when you’re running a SaaS company. So where do you even begin?

In this article, we will talk about the different SaaS KPIs that you need to track for different aspects of your SaaS business, namely marketing, sales, customer success, and finance.

Let’s dive right in.

 

SaaS Marketing & Sales KPIs

 

SaaS marketing and sales can involve a lot of strategies through a lot of channels.

You have content marketing, social media marketing, email marketing, and other efforts that enable you to attract new leads.

On the sales side, you have your whole SaaS sales funnel that you need to think about. From attracting leads to closing deals, there are a number of stages that your prospects go through.

With all of these moving parts, it can be difficult to keep track of everything and know which KPIs actually matter. But don’t worry, we’ve got you covered.

Here are some essential marketing and sales KPIs for your SaaS business:

 

1) Unique & Recurring Visitors

 

Let’s start with your website traffic. The number of unique and recurring visits to your website will give you an idea of the reach of your marketing efforts, especially for content marketing.

If you see that your unique visitors are going up, it means that more people are hearing about your company and checking out your website. On the other hand, if you see a decline, it might be time to revisit your marketing strategy.

As for recurring visitors, this metric lets you know how often people are coming back to your site. If you see a high number of recurring visitors, it means that they’re interested in what you have to offer and they’re coming back for more.

You can track your unique and recurring visits using Google Analytics.

 

2) Social Media Engagement & Growth

 

Another marketing metric to track is social media engagement and growth. This metric lets you know how well your social media marketing efforts are doing in terms of reach and engagement.

If you see a high level of engagement (likes, comments, shares, etc.), it means that people are interested in what you’re posting and they’re talking about it with their friends. This is a good sign that your social media marketing is working.

As for growth, this metric measures the number of new social media followers that you’re getting over time. If you see a steady increase in your followers, it means that more people are interested in what you have to say

You can monitor your social media engagement and growth using social media marketing tools, such as Hootsuite Insights or Sprout Social.

 

3) Email Open Rate

 

Another important metric to track is your email open rate. This is a key metric in knowing how well your email marketing efforts are performing.

If you see a high open rate, it means that people are actually opening the emails that you’re sending out. This is a good sign that your subject lines are effective and that people are interested in what you have to say.

You can track your email open rate and click-through rate using email marketing tools, such as Mailchimp or Constant Contact.

 

4) Click-Through Rate (CTR)

 

The click-through rate (CTR) measures the number of times people click on a link in your email, divided by the number of times the email is opened.

This metric lets you know how effective your call-to-action (CTA) is in your email. If you see a high CTR, it means that people are actually clicking on the links in your email and taking action.

CTR may also refer to the clicks you are getting in your other marketing channels, such as social media or banner ads. A high CTR in these channels means that people are interested in what you’re offering and they’re taking action.

 

5) Lead Generation Rate

 

The lead generation rate measures the number of leads that you’re generating divided by the number of visitors to each of your marketing channels.

This metric lets you know how effective your lead generation efforts are. If you see a high lead generation rate, it means that you’re doing a good job of converting your website visitors into leads.

You may want to find your lead generation rate for each channel to see which ones are most effective at capturing leads.

 

6) Lead Velocity Rate (LVR)

 

If lead generation rate measures the number of leads you’re capturing per channel, LVR gives you how much your qualified leads are growing.

There are two types of qualified leads you need to factor into this: marketing qualified leads (MQLs) and sales qualified leads (SQLs).

MQLs are leads that have shown an interest in your product or service. They may be recurring visitors to your site or they may have downloaded a free ebook from it. But they’re not quite ready to buy yet.

SQLs, on the other hand, are leads that are more ready to buy and are already willing to talk to your sales team.

To find your LVR, get the difference between last month’s number of qualified leads to the current one. Then divide it by the number of last month’s qualified leads.

 

Lead velocity rate formula

 

7) Conversion Rates

 

The conversion rate is the percentage of people who take the desired action within your sales funnel stage.

For example, let’s say you want your MQLs to click on that CTA that lets them contact your sales team. The percentage of people who go through that desired action is your MQL to SQL conversion rate.

You can also find the conversion rate for other stages of the SaaS sales funnel, like the lead-to-customer conversion rate.

 

8) Average Sales Cycle Length

 

The average sales cycle length is the number of days it takes to convert a lead into a paying customer.

This metric can be useful in understanding how long it’s taking you to close deals. If you see a long sales cycle, it may mean that you need to work on your closing skills or speed up your demo process.

 

9) Activation Rate

 

Winning new customers for a SaaS company rises and falls on whether or not your prospect sees your SaaS product’s value.

That’s why a lot of SaaS companies use free trials or freemium models as a marketing tool. It delivers value to the users even before they become customers.

“Activation” refers to an event that indicates that the user has already experienced the value of a SaaS product.

For example, activation for a customer relationship management (CRM) software might be the act of creating a customized sales pipeline. Or for an email management platform, it might be automating 100 emails.

The activation rate is the percentage of users who have performed that activation event.

Tracking your activation rate is important because it can give you insights into whether or not you are successfully providing value to your users.

 

SaaS Customer Success KPIs

 

When it comes to the SaaS business model, growth is not just about getting new customers. It’s also about keeping the customers you have.

That’s why SaaS KPIs related to customer success are just as important as those related to acquisition and activation.

 

10) Number Of Active Users

 

The number of active users is the number of people who are using your SaaS product on a regular basis.

This metric is important because it indicates whether or not your customers are actually getting value from your product.

If you see a decline in the number of active users, it’s a sign that you need to take action to address the issue.

You may choose to count your active users both in the short term and long term. As such, you would be measuring your daily active users (DAUs) and monthly active users (MAUs).

 

11) Customer Retention Rate

 

The customer retention rate is the percentage of customers who stay with your company over a certain period of time.

For example, let’s say you had 1000 customers last month. This month, there were 900 left. That gives you a customer retention rate of 90%.

This metric is important because it tells you how well you’re doing at keeping your customers happy. If you see a decline in retention, it’s a sign that you need to take action to address the issue.

 

12) Customer Churn Rate

 

The customer churn rate is the opposite of the customer retention rate. It is the percentage of customers who cancel their subscription or stop using your product over a certain period of time.

For example, let’s say you had 1,000 customers last month. This month, 100 of them left. That gives you a customer churn rate of 10%.

This metric is important because it tells you how fast you are losing your customers. If you see an increase in churn, it’s a sign that you need to take action to address the issue.

 

13) Net Promoter Score (NPS)

 

The Net Promoter Score (NPS) is a metric that measures customer satisfaction and advocacy.

It does this by asking customers how likely they are to recommend your product to a friend or colleague on a scale of 0 to 10.

Then you categorize your respondents into three groups based on their answers:

Promoters: Customers who score your product as a 9 or 10

Passives: Those who score it as a 7 or 8

Detractors: Those who give a score of 6 or below

NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. So if 50% of your customers are promoters and 10% are detractors, your NPS would be 40%.

The resulting overall score can range from -100 (all are detractors) to 100 (all are promoters).

This metric is important because it gives you a quick way to measure customer satisfaction.

Ideally, your NPS should be well over 30. That means that most of your customers are happy with your SaaS product.

If your NPS is close to 0, that’s a sign that you need to take action to address customer satisfaction issues. Especially for those detractors.

If the score goes below 0, that means you have more detractors than promoters. This is a sign that you need to take serious action before your customers add to your churn rate.

 

Net promoter score formula and sample survey

 

14) Customer Satisfaction (CSAT) Score

 

The customer satisfaction (CSAT) score is another metric that measures customer satisfaction.

Unlike NPS, which only asks customers how likely they are to recommend your product, CSAT asks customers how satisfied they are with your product on a scale of 1 to 5.

Ideally, you want most of your customers to rate their satisfaction as a 4 or 5. That means they’re happy with your SaaS product.

In fact, calculating your overall CSAT score only involves the 4s and the 5s. You simply take the percentage of customers who rated their satisfaction as a 4 or 5.

For example, if 70 out of 100 respondents rate their satisfaction as a 4 or 5, your CSAT score would be 70%.

 

SaaS Financial Metrics

 

In any business, the best measure of success is its ability to generate revenue and a positive cash flow.

And SaaS companies are no different.

But the SaaS business model is quite different from traditional businesses. As we mentioned earlier, SaaS providers need to retain their existing customers. You have long-term relationships and recurring transactions.

So, the financial metrics for a SaaS company may be quite different from those of a traditional business.

Let’s take a look at the important SaaS financial KPIs you need to track.

 

15) Monthly Recurring Revenue (MRR) & Annual Recurring Revenue (ARR)

 

The monthly recurring revenue (MRR) is one of the most important financial metrics for a SaaS company.

It is simply the total amount of revenue that you generate each month from your subscribers.

For example, if you have 100 customers who each pay $10 per month, your MRR would be $1000. If you add 10 new customers at the same price point, your MRR would increase to $1100.

This metric is important because it tells you how much revenue you can expect to receive each month.

Your ARR, on the other hand, is the revenue you generate each year. It’s important for forecasting long-term growth.

To calculate your ARR, simply multiply your MRR by 12.

 

16) MRR Growth Rate

 

The MRR growth rate is the month-over-month percentage change in your MRR.

This metric is important because it shows you how quickly your business is growing.

To calculate your MRR growth rate, simply take the difference in MRR from one month to the next, and divide it by the earlier month’s MRR.

Ideally, you want to see a positive MRR growth rate each month. That means your SaaS business is growing.

 

MRR growth rate formula

 

17) Expansion MRR

 

Expansion MRR is the month-over-month growth in MRR from your existing customers.

This metric is important because it tells you how well you’re retaining your existing customers and upselling them to higher tiers.

To calculate expansion MRR, simply take the difference in your MRRs from before and after upselling.

For example, imagine you had 100 customers paying $10 per month. Then 10 of them upgraded to the $20 per month tier. Your MRR would jump from $1000 to $1100. That would amount to an expansion MRR of $100.

 

18) Revenue Churn Rate

 

Earlier, we mentioned customer churn. But another type of churn is revenue churn.

Revenue churn is the percentage of revenue that you lose each month from customers who cancel their subscriptions.

For example, if you have an MRR of $1000 and you lose $100 in revenue from customers who cancel, your revenue churn rate would be 10%

This metric is important because it tells you how much revenue you’re losing each month.

Ideally, you want to keep your revenue churn rate as low as possible. That means fewer customers are canceling their subscriptions.

 

19) SaaS Quick Ratio

 

The SaaS quick ratio is a key financial metric that you need to track.

Note that this is different to the quick ratio or acid test ratio that measures how a company’s short-term assets compare to short-term liabilities.

The SaaS quick ratio measures your ability to generate positive revenue despite churn and downgrades. It takes four factors into account: new MRR, expansion MRR, churn MRR, and contraction MRR.

New MRR: The revenue you generate from new customers

Expansion MRR: As we mentioned above, this is month-over-month growth in MRR from your upselling and cross-selling efforts

Churn MRR: The revenue you lose each month from customers who cancel their subscriptions

Contraction MRR: The revenue you lose each month from customers who downgrade their subscriptions

To calculate your SaaS quick ratio, simply take the sum of your new MRR and expansion MRR, and divide it by the sum of your churn MRR and contraction MRR

Ideally, you want your SaaS quick ratio to be positive. That means you’re generating more revenue than you’re losing.

 

SaaS quick ratio formula

 

20) Average Revenue Per User (ARPU)

 

The average revenue per user (ARPU) is a key metric for any SaaS business. It tells you how much revenue you’re generating, on average, from each paying customer.

To calculate your ARPU, simply take your total MRR or ARR and divide it by the number of paying customers you have.

 

ARPU formula

 

For example, let’s say you have an MRR of $1000 and 100 paying customers spread across different subscription tiers.

Your monthly ARPU would be $10.

This metric is important because it tells you how much revenue you’re generating from each customer. The higher your ARPU, the more valuable each customer is to your business.

 

21) Average Customer Lifespan

 

The average customer lifespan is the average length of time that a customer remains a paying customer.

To calculate your average customer lifespan, simply take the total number of months or years that all of your customers have been paying customers, and divide it by the number of customers you have.

For example, let’s say you have three customers. One of them subscribed to your product for five years. Another churned after six years. Then the last one lasted for ten years.

Your average customer lifespan would be (5 + 6 + 10) / 3 = 7 years.

Of course, in the real world, you would be dealing with hundreds (if not thousands) of customers. So you would probably be calculating your average customer lifespan using a spreadsheet.

 

22) Customer Lifetime Value (LTV)

 

Customer lifetime value (CLV) is the total amount of revenue that you’ll generate from a customer, over the course of their lifespan.

To calculate your CLV, simply multiply your annual ARPU with your average customer lifespan.

 

CLV formula

 

For example, let’s say you have an annual ARPU of $1000 and your average customer lifespan is 7 years.

Your LTV would be $1000 * 7 = $7000.

This metric is important because it tells you how much revenue you can expect to generate from each customer over the course of their subscription to your product.

The higher your CLV, the more valuable each customer is to your business. That means you can afford to spend more to acquire them in the first place.

 

23) Customer Acquisition Cost (CAC)

 

Customer acquisition cost (CAC) is the amount of money that you need to spend, on average, to acquire a new paying customer.

To calculate your CAC, simply take your total marketing and sales expenses for a period of time, and divide it by the number of new paying customers you acquired during that time.

 

CAC formula

 

For example, let’s say you spent $200,000 on marketing and sales last month, and you acquired 100 new paying customers.

Your CAC would be $200,000 / 100 = $2000.

This metric is important because it tells you how much it costs you to acquire a new customer. But regarding whether the cost is worth it or not, you need to stack it against your CLV.

That brings us to our next KPI…

 

24) CLV:CAC Ratio

 

The CLV:CAC ratio is simply the ratio of your customer lifetime value to your customer acquisition cost.

To calculate your CLV:CAC ratio, simply take your CLV and divide it by your CAC.

For example, let’s say you have an CLV of $7000 and a CAC of $2000.

Your CLV:CAC ratio would be $7000 / $2000 = 3.5.

This metric is important because it tells you whether your marketing and sales efforts are worth the money. If your CLV:CAC ratio is less than 1, that means you’re spending more to acquire a customer than you’re ever going to make back from them.

Ideally, you want your CLV:CAC ratio to be at least 3. That means you’re making $3 for every dollar you spend on marketing and sales.

 

Final Thoughts About SaaS KPIs

 

There you have it. Those are the most important KPIs for any SaaS business.

Monitoring these KPIs on a regular basis will give you a good idea of how your business is performing, and where you need to make improvements.

Of course, every business is different. So you may need to track additional (or different) KPIs in order to get a complete picture of your business.

But the 24 metrics on this master list would be a good start.

Want more guides and strategies that can help you grow your SaaS business? Visit our blog here.

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Ken Moo